Question

Chad runs a perfectly competitive coffee shop that has annual profits of $100,000. He has the...

Chad runs a perfectly competitive coffee shop that has annual profits of $100,000. He has the option of renting out the coffee shop for $50,000 per year, and he has three outside offers from competitors to work as a senior barista at Starbucks (for an annual salary of $30,000), at Simon's coffee house (for an annual salary of $40,000), and at Peet's coffee shop (for an annual salary of $60,000). He can rent out the shop and work for one of the competitors, but can only work for one of the competitors. What should Chad do?

A) He should rent out his coffee shop and take the job at Simon's.

B) He should continue to run his coffee shop.

C) He should rent out his coffee shop and take the job at Starbucks.

D) He should rent out his coffee shop and take the job at Peet's.
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Chad runs a perfectly competitive coffee shop that has annual profits of $100,000. He has the option of renting out the coffee shop for $50,000 per year, and he has three outside offers from competitors to work as a senior barista at Starbucks (for an annual salary of $30,000), at Simon's coffee house (for an annual salary of $40,000), and at Peet's coffee shop (for an annual salary of $60,000). He can rent out the shop and work for one of the competitors, but can only work for one of the competitors. What should Chad do?

Option B) He should continue to run his coffee shop. is Correct answer,

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